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NASCAR charter prices have
been on an upward trend the last several years, but that march could be halted – at least temporarily – if Stewart-Haas Racing unloads several of them over the coming months as expected, according to industry executives familiar with the matter. The assets, which are NASCAR’s version of franchising for teams, have risen from being worth just a couple million dollars in the opening years of the system to the most recent sale — a
purchase last year by Spire Motorsports from Live Fast Motorsports — being for a number that approached $40M last year.
The charter system started in 2016, and the teams that got one received them for free. Currently, there are 36 charters currently spread across 15 teams in the NASCAR Cup Series, and teams are allowed to have up to four each. SHR controls four charters and is said to be the team most likely to sell one this season amid a steep drop in sponsor revenue — they’ve lost eight figures in just the past year due to the departures of Anheuser-Busch, Smithfield Foods and Hunt Brothers Pizza. Since then, neither team co-owners Tony Stewart and Gene Haas have addressed the rumors, which have only intensified, according to industry sources as well as published reports from Fox Sports. Fox reported earlier this month that SHR “has sent prospective buyers information on what it would take to purchase a charter.”
With the possibility SHR could sell as many as all four of its charters, supply has shot up in the charter market at the same time that teams have yet to strike a new revenue sharing agreement with NASCAR
Those factors are depressing prices at least temporarily, sources said. SHR could sell each charter for between $20-30M apiece, industry sources familiar with charter market dynamics said in recent weeks. Still, the same people said that fresh record highs for charters can still be established in the coming years as an
improved revenue sharing agreement between the teams and NASCAR Holdings gets locked in during the coming months and as the remaining charters that are available for purchase become more scarce.
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Teams that have been said to be in the mix to purchase SHR charters include 23XI Racing, Trackhouse Racing, and Front Row Motorsports. An announcement on the charter sales could come within weeks, according to sources. Due to the uncertainty around SHR, some of its drivers and their agents have started reaching out to other teams about options for next year in case they lose their seat, according to three people familiar with the matter.
The equity breakdown between Haas, a machine parts titan, and Stewart, a NASCAR Hall of Famer, is unclear. The two first announced they were teaming up in 2008, and SHR won the Cup Series championship six years later with Kevin Harvick as the driver and Budweiser as the primary sponsor. The team has been a powerhouse at times over its existence, and the idea of it downsizing significantly or even shutting down entirely would have been unthinkable just half a decade ago.
Cup Series teams in NASCAR currently rely on sponsorship for up to 75% of their annual total revenue, but sponsorship revenue has been tougher to come by for all NASCAR teams these days, and many say they are not profitable on a year-to-year basis. SHR has not been immune to the trend. It’s lost a host of big-budget brands over the last decade, including GoDaddy and Aspen Dental in addition to the three aforementioned brands. SHR has declined comment in recent months when asked about its future after 2024.
The record for a charter before last year came in 2021, when 23XI paid $13.5M for the now defunct Starcom Racing. Spire paid just $6M to buy the now defunct Furniture Row Racing’s charter in 2018, SBJ previously reported. Factors involved in the rise of the prices have included the debut of NASCAR’s seventh-generation car in 2022 that was designed to make the team ownership model cheaper.
However, while NASCAR’s charters have increased some eleven-fold in value, the assets are lagging behind other sports leagues’ franchise values. For example, the NWSL got $53M in franchise expansion fees from groups in San Francisco and Boston. Meanwhile, the owners of the Warriors are
paying $50M to get a WNBA expansion team, which will be called the Golden State Valkyries.
Teams do not own any equity in NASCAR itself, which is why the charters are different from stick-and-ball franchises. Teams have been working to get the charters made permanent starting next year to no avail, with NASCAR instead offering a seven-year extension concurrent with its media rights.
